One reason that monopolies often earn zero economic profits is that
a. many monopolies are regulated by the government
b. competitors cut prices
c. barriers to entry are low
d. collusion prevents profits
e. costly concessions to labor suppliers reduce economic profit
A
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Historically, empirical evidence showed that it was more cost effective to have a single generator of electricity serve a particular region's electricity needs than to have several smaller units compete against each other
More recently, technological advances have occurred in the generation of electricity that allow much smaller generating units to produce electricity for the same average cost as much larger units. Explain how this change would be reflected in the firm's long-run average cost curve and minimum efficient scale.
Use the following statements to answer this question: I. A network externality is a situation in which each individual's demand depends on the purchases of other buyers. II
Network externalities are mainly positive effects resulting from the actions of others, while ordinary externalities are mainly negative effects resulting from the actions of others. A) I and II are true. B) I is true and II is false. C) I is false and II is true. D) I and II are false.